BIM will leverage the learning gained during the marketing and issuance of Asia’s first securitisation of project finance and infrastructure loans, which Clifford Capital affiliate Bayfront Infrastructure Capital (BIC) launched last year (2018).

BIM’s $1.98 billion capitalisation plan will have a debt-to-equity ratio of 91:9 as follows:

$1.8 billion debt

$180 million equity

Clifford Capital – $126 million (70%)

AIIB – $54 million (30%)

“We should think about BIM as a warehousing and distribution platform,” said BIM chief executive Premod Thomas. “It will take out loans from participating banks. BIM will then hold them on its balance sheet, which would effectively serve as a warehousing facility until an adequate quantity amasses, pending their drop-down via distribution platform in subsequent issuances.”

BIM intends to accelerate the time to issuance. BIC took about 18 months.

“We are looking to come to market between 12-15 months after going live in Q1 2020. This would mean we shortened the process by three to six months as a result of the learning of the BIC transaction and issue in Q1 2021,” said Thomas.

Another source put the pace even quicker. They said the first issuance could be in Q4 2020. “It needs to be before December 2020; because that’s a dead period, so maybe November. Or BIM will need to wait until February 2021.”

BIM will take-out infrastructure loans from the balance sheet of banks.

“The term take-out facility is evocative of the take-out from the balance sheet of the banks. It was developed between Clifford Capital and our conversations with the Monetary Authority of Singapore (MAS),” said Thomas. “We will probably not use the term take-out facility because that was a generic description of what it was we were seeking to do. We will increasingly use the term bayfront infrastructure.”

Clifford Capital and now BIM have been negotiating take-out agreements with 20 international banks and five development finance institutions.

An important area of the discussions has been on the eligibility framework. Part of the reason BIC took so long, Thomas noted, was that the participating lenders weren’t clear on what loans would be eligible.

“Adverse selection was a big potential problem, with the banks cherry-picking the loans,” said Stefen Shin, AIIB’s principal investment officer of capital markets and structured products. “We realised we needed a well-structured process with the participating banks.”

Thomas, who doubles as Clifford Capital's head of corporate strategy, told IJGlobal that “those understandings are now being baked into MOUs with each of the institutions”.

The BIM chief executive added: “Now we are much clearer about how the loans should look, we are spreading that information across to this larger group. Having a clear take-out eligibility framework will reduce one of the frictions to getting the loans off these banks’ balance sheets onto ours.”

He stressed that beyond loan quality BIM would aim to warehouse a strong diversified portfolio of loans based on industry, geography, structure and pricing. “The greater the diversification, the better the rating of the capital structure,” Thomas argued.

Environmental, social and governance (ESG) considerations will be another factor. Most if not all the participating banks will be in compliance with Equator Principles 3. Thomas underscored that BIM won’t warehouse coal loans.

“This is one of the big areas where AIIB will add value as the newest DFI on the block, which has very high ESG policies and standards,” said Thomas.

Like BIC, BIM’s initial issuances will be in US dollars. “We do, however, have the ability to do a small amount in AUD,” Thomas confirmed, “because Australia is the deepest infrastructure financing market in our region.” BIM won’t get into Yen for the foreseeable future.

This currency constraint will, therefore, preclude most local banks from participating in the beginning, as they don’t do many US dollar deals. “Bank of China and the special drawing rights market are huge,” Shin said, “but they don’t do lots of foreign currency lending.”

Shin highlighted the difference between the US and Asia financial markets. “If it was a US deal, you wouldn’t need BIM,” said the former UBS fixed income structuring executive director. “The reason is that the US syndicated loan market is super, super liquid. You can turn around deals quite quick.”

However, in the US mortgage market or Asia infrastructure loan market, Shin continued, the ramp-up period is significant. “You cannot gather $500 million in weeks. It’s impossible.”

“We will build up our book to an adequate size in the warehouse,” said Thomas. Shin alluded to roughly $700 million and then drop down after BIM distributes a portion to institutional investors.

Thomas stressed that BIM’s book is an evolving number capped at $1.98 billion.

Shin likened the process of gathering food in a refrigerator.

“Gather the assets and put it in a big refrigerator and keep it nice and cool,” he told IJGlobal, “until you get a sizeable amount of food in the refrigerator.”

Distribution platforms

BIM has an initial target to issue securities every 12-15 months.

“Like BIC, each issuance will likely be $400-600 million, close to the $500 million sweet spot for issuance size,” said Thomas.

The pilot issuance in July 2018 had 25 institutional investors of insurance companies, pension funds, endowments, specialised asset managers from Asia, Europe and the Middle East during book-building with 16 ultimately joining. Thomas estimates those numbers will stay roughly the same for each issuance.

A key difference with BIM, Thomas pointed out, would be he will be marketing to wider set of investors. “We might look at 144A distribution format, which would take us to onshore US. It really depends on the interest we garner as we go wider in our search.”

Like in BIC, BIM will hold 5-10% of the equity on the unrated tranche.

“Some don’t like this comparison but generally what Freddie and Fannie Mac do for the US mortgage market is say to the mortgage banks, ‘If you have loans that conform with our eligibility criteria, we’ll take it off your books’,” said Shin.

“We’ll build up our book and regularly issue MBSs – or in our case infrastructure asset-backed securities – in the market,” added the AIIB investment officer. “Freddie and Fannie are state-sponsored similar to Clifford Capital since it’s 40% owned by Temasek.”

However, the US mortgage market, and Freddie and Fannie specifically, do not do tranching like CLOs, noted Shin. Yet he stressed the role of Freddie and Fannie is huge.

Thomas also mentioned US alternative asset manager Mariner. It is active in the project finance securitisation space, and generally acquires the unrated, equity tranches, the lowest part of the structure in synthetic securitisation. “These are rough comparisons,” cautioned the BIM chief executive.

“Our business model is the first of its kind in Asia,” emphasised Thomas. “The ability to warehouse loans for an extended period of time is quite unique. Warehousing will benefit from a Singapore Government guarantee.”

Challenges

Thomas ticked off seven challenges with BIM’s business.

Continued market friction will be permissions for loan transfer. Different parties, including sponsors, have to consent before the loans move into the warehouse. Thomas highlighted the Asia Pacific Loan Market Association’s work on standardised documentation as a way to mitigate the challenge.

Another obstacle is getting the export credit agencies comfortable with BIM’s business model. “Our aim is to talk with the ECAs," said Thomas, "and perhaps escalate the conversations on a G-to-G basis. Having AIIB join in those conversations will be beneficial.”

A third sore point is the time-consuming process to gain a credit rating for a security’s tranches. BIM, which intends to work with Moody’s, concedes that because it is a new asset class, the pace is understandable. As more transactions occur with these rating agencies, this process will accelerate.

Three other frictions involve the lack of pricing benchmarks, liquidity and research coverage. “We are working on certain pricing benchmarks with the education sector,” alluding to EDHECinfra’s pricing benchmark project.

Investor education is the seventh challenge. “During BIC we spoke with a lot of people,” said Thomas. “As BIM’s message resonates, we intend to approach more and more institutions.”

The future?

Infrastructure asset-backed securities are in their very early days, cautioned Shin. One deal doesn’t transform the market. “We need three good deals in a year, then once you get over $1 billion in primary issuances, people then begin to say, ‘Okay, this is interesting’.”

He then provided a buoyant scenario of how the market may evolve.

“If you are a sovereign wealth fund or insurer, you won’t hire a new person or team to cover this new asset class when there’s no massive primary issuance. You can’t get more than some 10% on these deals. You’re not going to set up two or three-person team to buy $50 million of assets a year. That’s not workable.”

A $1 billion primary issuance market means that the asset class is now on institutional investors’ radar.

“Once we cross $2 billion in new issuance, then you have a new market and large players maybe build a two-person team – an analyst and an execution person,” said Shin.

He added: “Then imagine you get a lot of these two-or-three-person teams at different institutional investors. The originating banks would notice and likely hire sales dedicated to this. Go with $200 million for three years; that’s $600 million an investor has gobbled up.

“Then the banks might want to buy and sell a little bit, with investment bankers saying, ‘I need to make a market and take some inventory’. All these things happen slowly in a natural market-building process, however.”

He ends with a pregnant question.

“How fast can we get people to be really interested so that all the players in the market – from sponsors to investment bankers – come to the conclusion that they don’t want to be on the outside looking in?”

BIM will acquire project and infrastructure loans from financial institutions, and manage them with the objective of distributing securitized notes to investors

The Asian Infrastructure Investment Bank (AIIB) has set up a securitization platform with Singapore-based Clifford Capital, with the aim of helping infrastructure lenders sell down loans and recycle their capital into new projects.

Bayfront Infrastructure Management Pte (BIM) will be 30% owned by the AIIB and 70% by Clifford Capital.

BIM will acquire a predominantly brownfield project and infrastructure loans from financial institutions, and warehouse and manage them, with the objective of distributing securitized notes to institutional investors in the public markets. BIM will also sponsor, structure and manage such distribution issuances and invest in the equity tranches or vertical slices of its securitization issuances to demonstrate alignment of interest with investors.

A statement from the AIIB said that the platform will benefit existing bank lenders as it relieves their capital constraints by purchasing on balance sheet exposures. It also provides global institutional investors with access to a diversified project and infrastructure loan portfolio through a new investable asset class.

The move comes at a time when governments around the world are trying to bring more institutional debt into infrastructure financing. The big infrastructure financing banks currently provide most of this private debt, but are being held back by higher capital charges for loans on their balance sheets, put in place to make the banking sector safer in the wake of the 2008 financial crisis.

The platform will unlock capital for infrastructure financing by facilitating the recycling of capital and liquidity. It will also give long-term investors such as insurance companies and pension funds an attractive asset class to invest in.

The establishment of BIM builds on the successful issuance of Asia’s first securitization of project finance and infrastructure loans through Bayfront Infrastructure Capital (BIC), launched in Singapore in 2018. The BIC transaction demonstrated the viability of the Infrastructure Take-Out Facility (TOF) concept. With BIC progressing to a new phase, all future issuances in relation to the TOF will now be undertaken by BIM.

The AIIB said that debt instruments issued by BIM to acquire and warehouse loans from banks are expected to benefit from a guarantee provided by the Government of Singapore (Government Guarantee). However, this Government Guarantee will not cover the securitized products BIM will structure and distribute to investors.

BIM is expected to be capitalized at US$1.98 billion, comprising US$180 million in equity and US$1.8 billion in debt issuance capacity. AIIB will invest US$54 million, representing 30% of BIM’s equity capital, with the remaining US$126 million contributed by a new holding company to be established by Clifford Capital.

The equity commitments from its shareholders and the proposed Government Guarantee are subject to the execution of final documentation. BIM is expected to be operational from the first quarter of 2020.

“This is an important milestone for Clifford Capital as we progress from the successful launch of the Infrastructure Takeout Facility with BIC to the establishment of BIM,” says Clifford Capital Chief Executive Officer Clive Kerner. “We also welcome the participation of AIIB as a strategic partner in this landmark platform that addresses market gaps for infrastructure financing in Asia.”

“AIIB’s investment in BIM is closely aligned with our objectives of developing Asian infrastructure as an asset class and supporting private capital mobilization,” adds AIIB vice president and chief investment officer D.J. Pandian. “Through robust environmental, social and governance criteria, the platform provides institutional investors with a unique opportunity to support sustainable infrastructure projects in Asia.”

Clifford Capital launches platform for Asian infrastructure debt

The Temasek-backed structured finance solutions provider aims to mobilise a new pool of institutional capital

FOLLOWING the success of its pilot issuance of Asia's first infrastructure project finance securitisation last year, Temasek-backed Clifford Capital now has plans to set up a platform to mobilise a new pool of institutional capital for infrastructure debt in Asia.

Also the first of its kind in this region, the platform is expected to be capitalised at US$1.98 billion, comprising US$180 million in equity and US$1.8 billion in debt issuance capacity.

The Asian Infrastructure Investment Bank (AIIB) is a partner and will invest US$54 million, representing 30 per cent of BIM's equity capital in the platform, while Clifford Capital holds the remaining.

In an interview with The Business Times, Clifford Capital chief executive Clive Kerner explained how this would work. Clifford Capital has already engaged with 20 leading global project finance banks to set out a framework for the types of project and infrastructure loans - predominantly brownfield - that the platform, Bayfront Infrastructure Management (BIM), will acquire.

This is to enable banks to recycle their balance sheets by offloading them onto the BIM platform in light of tightening Basel III capital requirements, so that they can continue to engage in their project finance business in a profitable manner.

Mr Kerner said: "The banks have a fantastic ability to originate projects, structure them and take on the constructions risks up until the operational phase, but because of increasing regulation, the banks are now finding it much harder to keep these longer-term exposures on their balance sheets."

At the same time, once infrastructure projects start operating, they tend to generate very stable cash flows which fit the investment appetite of institutional investors.

Thus, on acquiring these loans from banks, BIM will "store" them in a warehousing facility, holding them on its balance sheet until its portfolio of loans for distribution has reached a critical mass. When market conditions are optimal, it will then issue these securities to institutional investors, similar to the US$458 million issuance which Clifford Capital did in July last year.

Of the latest development, Mr Kerner said: "This won't be a one-off deal, but a platform that will be up and running for about 10 years, so each year there will be a certain volume of loans that will come onto the balance sheet. At the end of 10 years, we hope to have created an asset class for infrastructure debt. That will be our first phase, and we will review to see how we are doing after that."

In fact, BIM targets to take out US$7 billion in assets from banks over the course of a decade, and "drop down" about US$5 billion in note issuances. It is targeting similar investors to its year-ago transaction - such as insurance companies, pension funds, sovereign wealth funds, family offices, private wealth, and asset management firms.

Lending towards project financing in Asia has been largely dominated by banks, export credit agencies and multilateral agencies, and there has been very little institutional debt involved historically.

Premod Thomas, Clifford Capital's head of corporate strategy as well as CEO-designate of BIM, noted that over the last three to five years, about US$130 billion of infrastructure loans - comprising local currency and USD-denominated loans - were issued by banks annually. Of this, the USD-denominated portion makes up about US$30 billion. This will be the "catchment" that BIM will be looking to tap.

There are also other medium- and long-term goals for this initiative. Essentially, this will create a new asset class that will help to scale up institutional investment in Asian infrastructure debt. Mr Kerner said: "Once we get to US$4 billion to US$5 billion in issuance, where there's enough issuance in the market to facilitate more trading, more liquidity, you can think about benchmarking from a pricing perspective and research. That's really what we want to get to."

Benchmarking will enable pricing of the collateralised loan obligations (CLOs) to be determined with more accuracy and relevance to the actual asset class. In fact, in Clifford Capital's proof-of-concept last year, it found that many investors were at a loss when trying to find an accurate benchmark on which they could price the offering. They tried looking at various kinds of private debt and even the US CLO market, but there was nothing close enough for comparison.

Clifford Capital is also trying to get financial institutions to cover these products through research, the same way equity and fixed income instruments get covered, so that investors can be better informed. Besides sponsoring, structuring and managing the distribution issuances, BIM will also invest in the equity tranches or vertical slices of its securitisation issuances, meaning that it will invest in part, or all, of the first-loss pieces of the individual securitisations, in order to align their interests with investors. "I think that's what investors expect to see - that we have skin in the game," Mr Kerner said.

Debt instruments issued by BIM to acquire and warehouse loans from banks are expected to benefit from a guarantee provided by the Singapore government, which will not cover the securitised products that BIM will structure and distribute to investors.

In a statement, D J Pandian, vice-president and chief investment officer at AIIB, said the bank's investment in BIM is closely aligned with its own objectives of developing Asian infrastructure as an asset class and supporting private capital mobilisation.

Gillian Tan, executive director and head of financial markets development at the Monetary Authority of Singapore, added that the platform dovetails with Singapore's ambition to become a full-service Asia infrastructure financing hub. BIM expects to begin the acquisition of assets from banks from the first quarter of 2020; the issuance will likely happen later in 2020 or early 2021.

Their newly created venture, Bayfront Infrastructure, will deploy the funds over the next few years to acquire the loans from banks with the aim of encouraging more private investment in infrastructure in emerging Asia.

The venture will combine portfolios of infrastructure loans for completed projects from 20 international banks into diversified pools drawn from different markets and sectors. The loans will be divided into three different investment grade tranches with an unrated, more risky tranche to be held by Bayfront.

Lenders have increasingly become wary of the emerging Asia infrastructure sector because of regulatory demands that they set aside more capital against such loans.

Big pension funds and insurers, meanwhile, which have the long-term capital to finance projects that may require 15 or 20 years of investment, fear the exchange rate risk in emerging markets, as well as other factors, such as corruption, are not usually worth the returns.

In the past, emerging markets have only received a sliver of international capital flows for infrastructure, while developed markets took 87 per cent, according to data from the AIIB.

Even this has decreased in recent years, according to Gautam Bandhari, Miami-based founding partner of I Squared Capital, an infrastructure fund that invests in Asia.

The gap between the funds available for building ports, roads, railway lines, power plants, telecoms and waste and water treatment in the region compared to the price tag has been growing in recent years.

“Developing countries will need to invest more than $2tn a year in infrastructure just to keep pace with projected GDP growth over the next 15 years,” McKinsey & Company wrote in a research note last month.

But Bayfront hopes that by breaking Asian infrastructure bank loans down and selling them in investment grade tranches, they will prove more digestible for institutional investors.

The ability to sell the loans might in turn enable banks to recycle the funds raised from the sales into new infrastructure projects.

Institutional investors such as Vanessa Wong, a managing director of asset manager Amundi in Hong Kong, have expressed initial support for the concept.

Bayfront’s balance sheet will be capitalised with $180m in equity and $1.8bn in debt, with Clifford contributing 70 per cent of the equity to the AIIB’s 30 per cent.

Clifford Capital, AIIB join up to securitise infrastructure debt

Singapore-based Clifford Capital and the Asian Infrastructure Investment Bank have announced the establishment of Bayfront Infrastructure Management, a first-of-its-kind entity to mobilise institutional capital for infrastructure debt in Asia.

Clifford Capital, in which Singaporean state investment holding company Temasek Holdings has a 40.5% shareholding, will take a 70% stake in BIM and AIIB will hold 30%. BIM is expected to be capitalised at US$1.98bn, comprising US$180m in equity and US$1.8bn in debt issuance capacity.

BIM will acquire predominantly brownfield project and infrastructure loans from financial institutions, warehouse and manage them, before securitising them and issuing structured notes in the public markets.

That will free up banks' balance sheets, allowing them to finance new projects, as well as adding to the supply of paper for investors from a relatively new asset class.

Clive Kerner, CEO of Clifford Capital, described that trade as a "proof of concept" to test whether banks and investors would support an infrastructure take-out facility.

Future deals will be issued off the BIM entity, and are expected to appeal to a similar investor base as the BIC trade, which attracted global insurers, pension funds, endowments, bank treasuries and pension funds.

New issues are expected to be denominated mainly in US dollars, though Kerner said it is possible there could be some local currency issues, with a small carve-out allowing Australian dollar transactions.

Like BIC, the new entity will focus mainly on Asia and the Middle East, though there is flexibility to look at emerging markets like Africa and Latin America.

Clifford Capital is in discussions with the AIIB for the development bank to bring over its ESG principles.

"Renewables will become an increasing focus," said Kerner. "What we will need to see happen first is for the stock of greenfield renewable assets to be built up."

Singapore's government has agreed to guarantee BIM's debt issuance to allow it to acquire the loans, but the guarantee will not extend to securitised products sold to investors.

BIM has already begun discussions with 20 top project finance banks, and Kerner said these banks have been given a good idea of what kinds of assets the vehicle is seeking.

The AIIB's participation is not expected to prevent BIM from talking to other development banks.

It is also likely that BIM will acquire some loans from Clifford Capital, freeing up Clifford Capital's balance sheet and allowing it to scale up future investments.

BIM will invest in the equity tranches or vertical slices of its securitisation issues to align its interests with investors, though it might also consider allowing specialist investors to participate in the unrated subordinated tranches.

Work on the first issue is expected to begin in the first quarter of 2020 when BIM becomes operational. As in the BIC trade, BIM will acquire infrastructure loans and warehouse them while it works with rating agencies and bookrunners to structure a deal.

"The first transaction took 14 months to complete that process, but we expect it to be quicker this time," said Clifford Capital's Premod Thomas, who will be CEO of BIM.

The first CLO transaction could arrive as soon as Q1 2021, Thomas said, and BIM is expected to issue structured instruments every 12 to 15 months thereafter.

Bayfront’s targeted capital structure of US$1.98 billion comprises $180 million in equity funding and the rest via debt financing. AIIB will contribute to 30% of equity and Clifford will account for the rest.

Singapore state investor Temasek is the biggest shareholder of Clifford Capital.

Asian Development Bank estimates show Asia will need approximately $1.34 trillion annually in infrastructure financing between 2016 and 2020 to sustain economic growth, of which the investment gap is about $455 billion, equivalent to 2.4% of the region’s GDP from 2016 to 2020.

The new company seeks to target that gap by mobilizing institutional capital for project and infrastructure loans.

“Banks are increasingly facing constraints in their ability to bridge the financing gap, due to regulatory constraints,” said Premod Thomas, CEO-Designate of Bayfront Infrastructure Management in an emailed response to Asia Times.

“Institutional non-bank investors are therefore best-placed to step in to fill the financing gap, particularly those seeking longer tenor assets to match their long-term liabilities.”

Thomas said many of these investors are reluctant or not ready to deploy their capital, mainly due to a lack of familiarity with the infrastructure asset class, especially in Asia, and a limited ability to take project construction risk given their preference for stable returns.

BIM, to be operational from the first quarter of next year, will acquire project and infrastructure loans from financial institutions, warehouse and manage them, and then distribute securitized notes based on the pooled assets to institutional investors in the public markets.

The company will also sponsor, structure and manage such distribution issuances, as well as invest in the equity tranches or vertical slices of its securitization issuances to back their confidence in the projects.

Debt instruments issued by BIM to acquire and warehouse loans from banks are expected to benefit from a guarantee provided by the government of Singapore, although such guarantees will not cover the securitized products that BIM will structure and distribute to investors. Singapore has the highest rating from the three global rating agencies.

Bayfront’s targeted capital structure of US$1.98 billion comprises $180 million in equity funding and the rest via debt financing. AIIB will contribute to 30% of equity and Clifford will account for the rest.

Singapore state investor Temasek is the biggest shareholder of Clifford Capital

Asian Development Bank estimates show Asia will need approximately $1.34 trillion annually in infrastructure financing between 2016 and 2020 to sustain economic growth, of which the investment gap is about $455 billion, equivalent to 2.4% of the region’s GDP from 2016 to 2020.

The new company seeks to target that gap by mobilizing institutional capital for project and infrastructure loans.

“Banks are increasingly facing constraints in their ability to bridge the financing gap, due to regulatory constraints,” said Premod Thomas, CEO-Designate of Bayfront Infrastructure Management in an emailed response to Asia Times.

“Institutional non-bank investors are therefore best-placed to step in to fill the financing gap, particularly those seeking longer tenor assets to match their long-term liabilities.”

Thomas said many of these investors are reluctant or not ready to deploy their capital, mainly due to a lack of familiarity with the infrastructure asset class, especially in Asia, and a limited ability to take project construction risk given their preference for stable returns.

BIM, to be operational from the first quarter of next year, will acquire project and infrastructure loans from financial institutions, warehouse and manage them, and then distribute securitized notes based on the pooled assets to institutional investors in the public markets.

The company will also sponsor, structure and manage such distribution issuances, as well as invest in the equity tranches or vertical slices of its securitization issuances to back their confidence in the projects.

Debt instruments issued by BIM to acquire and warehouse loans from banks are expected to benefit from a guarantee provided by the government of Singapore, although such guarantees will not cover the securitized products that BIM will structure and distribute to investors. Singapore has the highest rating from the three global rating agencies.

AIIB and Temasek-Backed Firm Launch Infrastructure Debt Platform

The platform builds on the successful issuance of Asia’s first securitization of project finance and infrastructure loans through Bayfront Infrastructure Capital, launched in Singapore in 2018.

Clifford Capital and the Asian Infrastructure Investment Bank (AIIB) have established Bayfront Infrastructure Management, a platform that will provide institutional capital access to infrastructure debt financing in Asia, the firm announced in a statement on Thursday.

The platform's capitalization is expected to be $1.98 billion, comprising $180 million in equity and $1.8 billion in debt issuance capacity. AIIB will invest $54 million, or 30 percent of BIM’s equity capital, while Clifford Capital will contribute the remaining $126 million, the statement said.

Infrastructure Financing Gap

There is a $455 billion infrastructure financing gap in Asia, BIM said, citing Asian Development Bank data. It said it hopes to unlock capital for infrastructure financing by facilitating the recycling of capital and liquidity by banks, who have traditionally been the largest lenders in this sector.

BIM will acquire predominantly brownfield project and infrastructure loans from financial institutions, warehouse and manage them, before securitizing them and issuing structured notes to investors, the statement said. This frees up banks' balance sheets and gives investors exposure to a new investable asset class that is also accessible, it said.

Clifford Capital is 40.5-percent owned by Singapore state investor Temasek.

The Asian Infrastructure Investment Bank (AIIB) and Clifford Capital have set up a US$2bn (€1.8bn) Asia infrastructure debt financing platform.

The duo have established the Bayfront Infrastructure Management (BIM) platform – expected to be operational from the first quarter of next year – to “mobilise a new pool of institutional capital” for infrastructure debt.

China-backed AIIB and Clifford Capital, which was established with support from the Government of Singapore, will take a 30% and 70% equity stake in the newly created BIM platform respectively.

AIIB is expected to invest US$54m for its stake, with the remaining US$126m contributed by a new holding company to be established by Clifford Capital. BIM is also expected to raise US$1.8bn, taking its total capital to US$1.98bn.

In a joint statement, companies said BIM will acquire ”predominantly brownfield project and infrastructure loans from financial institutions, warehouse and manage them, with the objective of distributing securitised notes to institutional investors” in the public markets.

”BIM will also sponsor, structure and manage such distribution issuances and invest in the equity tranches or vertical slices of its securitisation issuances to demonstrate alignment of interest with investors.”

“Through robust environmental, social and governance criteria, the platform provides institutional investors with a unique opportunity to support sustainable infrastructure projects in Asia.”

Clive Kerner, Clifford Capital CEO, said: “This is an important milestone for Clifford Capital as we progress from the successful launch of the infrastructure takeout facility with Bayfront Infrastructure Capital (BIC) to the establishment of BIM.”

BIC was established last year in connection with the creation of an infrastructure take-out facility that was designed and structured by Clifford Capital to mobilise institutional capital for infrastructure debt in Asia-Pacific and the Middle East.

Premod Thomas, BIM CEO-designate, said: “Leveraging on the success of BIC, we are now committed to developing BIM as a long-term sustainable platform to encourage institutional investor participation in the fast-growing infrastructure funding needs in Asia-Pacific and the Middle East.

“We look forward to working with AIIB and our bank partners as we leverage our platform to create sustainable investment products for institutional investors.”

The Asian Infrastructure Investment Bank (AIIB) and Clifford Capital have set up a US$2bn (€1.8bn) Asia infrastructure debt financing platform.

The duo have established the Bayfront Infrastructure Management (BIM) platform – expected to be operational from the first quarter of next year – to “mobilise a new pool of institutional capital” for infrastructure debt.

China-backed AIIB and Clifford Capital, which was established with support from the Government of Singapore, will take a 30% and 70% equity stake in the newly created BIM platform respectively.

AIIB is expected to invest US$54m for its stake, with the remaining US$126m contributed by a new holding company to be established by Clifford Capital. BIM is also expected to raise US$1.8bn, taking its total capital to US$1.98bn.

In a joint statement, companies said BIM will acquire ”predominantly brownfield project and infrastructure loans from financial institutions, warehouse and manage them, with the objective of distributing securitised notes to institutional investors” in the public markets.

”BIM will also sponsor, structure and manage such distribution issuances and invest in the equity tranches or vertical slices of its securitisation issuances to demonstrate alignment of interest with investors.”

“Through robust environmental, social and governance criteria, the platform provides institutional investors with a unique opportunity to support sustainable infrastructure projects in Asia.”

Clive Kerner, Clifford Capital CEO, said: “This is an important milestone for Clifford Capital as we progress from the successful launch of the infrastructure takeout facility with Bayfront Infrastructure Capital (BIC) to the establishment of BIM.”

BIC was established last year in connection with the creation of an infrastructure take-out facility that was designed and structured by Clifford Capital to mobilise institutional capital for infrastructure debt in Asia-Pacific and the Middle East.

Premod Thomas, BIM CEO-designate, said: “Leveraging on the success of BIC, we are now committed to developing BIM as a long-term sustainable platform to encourage institutional investor participation in the fast-growing infrastructure funding needs in Asia-Pacific and the Middle East.

“We look forward to working with AIIB and our bank partners as we leverage our platform to create sustainable investment products for institutional investors.”